Canadians are living longer. But this extended lifespan isn’t always a healthy one.
In fact, an increasing number of baby boomers are now living nine to 11 years past the time they’re considered healthy, says RBC Wealth Management. So clients must address the vulnerabilities they face.
Read: Clients don’t understand PoA for personal care: STEP
“Our concerns lie with the growing demographic of Canadians who will no longer be able to manage their own financial affairs due to health issues,” says Tony Maiorino, head of RBC Wealth Management Services.
He adds, “Creating a Power of Attorney (PoA) is a prudent course of action. Appointing the most appropriate person or people to take on the role of attorney is a vital decision.”
A PoA (Mandate in Anticipation of Incapacity in Quebec) is a legal document whereby one person (the donor) gives one or more persons (an attorney) the authority to act on his behalf, immediately or in the future.
Here are some factors to consider before clients appoint an attorney.
- Financial acumen: If the person in mind is inexperienced in managing finances, he may not be an ideal choice.
- Location and ability to travel: An attorney needs to be able to communicate important and timely decisions. Even with the ease of electronic communications, he may have to travel on short notice if an emergency arises.
- Age and stage in life: An older person may not be healthy when your client needs him. This person could also be managing a busy career and family and may not have the time to attend to affairs as they’re required.
- Organizational skills: The attorney will be responsible for the record keeping of your client’s POA, as well as managing his own POA. If he’s managing his own well, there’s a good chance he’ll be equally responsible with your clients.
- Emotional bias: If the attorney is a relative, he may have an emotional bias that prevents him from carrying out your client’s wishes, or have challenges when managing the expectations of other family members. Also, he may be in a conflict of interest if the cost of your client’s care will affect his potential inheritance.